Saturday, 18 October 2008

If anyone needs to be reminded of the current parlous state of the current economic situation, go no further than an item that appeared on Bloomberg online on 15 October 15. The topic of the article--the drying-up of sponsors for NASCAR in the U.S. For those of you who are not American, or are not steeped in American culture, NASCAR is short for the National Association for Stock Car Auto Racing. It is reported to be the no. 2 sport on U.S. television, trailing only U.S. football (that distinctive version of gladiator content without the four-legged lions). That makes it larger than either baseball or basketball as a preferred couch-potato past time.

NASCAR is particularly popular in the U.S. South and Midwest, but judging from its television ratings, either it manages to capture an enormous viewing public from those regions, or its passive fandom extends beyond these regions. Whatever the reason, the broadcasting of NASCAR competitions has been frequent and extensive fare of U.S. television for a long time.

Spot the NASCAR Sponsor

The article reports as follows:

"General Motors Corp., Chrysler Corp., Sears Holdings Corp. and Chevron Corp. will cut or drop sponsorships next season. Dario Franchitti, the 2007 Indianapolis 500 winner was forced out of the stock-car series by a lack of sponsors.

Teams with family names revered in stock-car racing like Petty, Waltrip and Earnhardt may enter 2009 with unfunded cars. The circuit might even have trouble filling 43-car fields.

``There's maybe 26 teams that have sponsorship for next year, and five or six that have partial,'' said Michael Waltrip, an owner and driver who shored up his finances by selling a stake to Fortress Investment Group LLC founder Robert Kauffman a year ago."

How ironic all of this is. Icon after icon of traditional corporate America is finding itself mired in heart-wrenching economic difficulties, where the cost of sponsorship outweighs the perceived benefits of wide-spread television exposure (or when any cost is simply too much in a struggle for company survival). Compare that with the purchase of English football clubs by various foreign groups, most notably from the cash-flush Middle East.

Or perhaps event sponsorship is not that great a marketing and branding investment. Eastman Kodak, virtually synonymous with the Olympics, announced that will no longer sponsor future Olympics. Another omen of US corporate distress or a changed perception of the efficacy of event sponsorship--or maybe a bit of both?